Why Care About Cryptocurrencies?

The money that you use today – fiat currency, issued as legal tender by the government – is controlled by the governments and banks who manage its supply, issue and distribution. Most of the time, it is good enough for day-to-day transaction… as long as you trust your government and your banks.

We can see examples of governments who have hyperinflated their currency through the course of history, or banks who hold money hostage from the families of those who own it. Sometimes, it can also just be inefficient; for example, when banks don’t clear an urgent international transfer over the weekends because they aren’t operating then.

In the aftermath of the financial crisis of 2007/2008, a person or persons called Satoshi Nakamoto created Bitcoin, which was described as “a peer-to-peer electronic cash system.” The first block in the Bitcoin blockchain included a message:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

This was (probably) meant as a jab at the current banking system. Suffering after the effects of the financial crisis, many banks were not able to stay afloat and had to rely on bailouts by governments to survive, using taxpayers’ money. Many of the original supporters of cryptocurrencies felt strongly against the way that governments could just “print money” to prop up the economy. When doing so, they are in effect devaluating the money that people hold and are putting control in the hands of politicians who may not know how to best act in the interest of their constituents.

With the birth of Bitcoin, many started seeing a clear way forward for a world in which people were in control of their assets. This, in addition to the rise of big internet companies who were selling their users’ data for profits, and we have the initial makings of a revolution. Idealists were starting to imagine a world in which we emerge as sovereign individuals, people who had complete say over our money, our privacy, our attention, and more – and thence the idea spread.